The Surprising Reason The Cigar City Brewing Founder Decided To Sell

Entrepreneurship is like a poker game. The longer you stay at the table, and the more chips you accumulate, the more you stand to lose if your luck runs out.

Most people think of starting a business as risky, but unless you invest a significant amount of start-up cash in your venture, you’re not really risking much but your time.

That changes if you’re lucky enough to get traction with your idea. You start to risk more and more of your wealth because the business you’ve built is actually worth something. The longer you hang on to it, the more you have to lose. In fact, I tell our customers over at The Value Builder System™ that the risk is highest when the business is at its most successful.

Cigar City Brewing

Recently I had the chance to interview Joey Redner, founder of Tampa-based Cigar City Brewing for my podcast, Built to Sell Radio. Redner’s craft beer operation started off in 2009 with the relatively modest goal of selling 5,000 barrels of beer per year.

Redner borrowed $800,000 from his father and some other family members and built a small brewery. Cigar City proved popular with the locals and Redner was able to sell 1,000 barrels of beer in his first year of business.

The business continued to grow but was thirsty for cash, eventually forcing Redner to take on an SBA loan. Redner quickly surpassed his 5,000-barrel goal and, by 2015, had scaled all the way up to 55,000 barrels per year, at which point he ran out of capacity in his brewing facility.

To get to the next level, Redner would have had to find another $20 million for a major expansion, but he was tired of the feeling of being “all in” at the poker table. He had built something successful and wanted to enjoy the financial security rather than having to roll his winnings into even more debt that he would have to personally guarantee with the bank.

Redner decided to sell even though his business was still growing and he had built a brand Floridians loved.

And therein lies one of the hidden reasons owners decide to sell. They are tired of shouldering all of the risk. Most of us have a limited appetite for risk and, as the Bob Dylan song goes, “When you ain’t got nothing, you got nothing to lose.” Start-ups aren’t risking much, but when you build something successful, every day that you decide to keep it is another day you have all (or most) of your chips on the table and, no matter how strong your hand, eventually we all decide to cash in.